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CIMB is pleased to announce that CIMB and CIMBB propose to undertake the following:

(a) CIMB proposes a capital swap to be implemented via a proposed issue of subordinated bonds (Bonds) equivalent of up to RM380 million (Proposed Bonds Issue) and a proposed capital distribution by CIMB to CIMBB via a cash distribution of RM350 million after the Proposed Bonds Issue (Proposed Distribution); and

Collectively, the Proposed Bonds Issue and Proposed Distribution are referred to as the Proposed Capital Swap.

(b) Upon completion of item 1(a) above, CIMBB would implement the Proposed CIMBB Distribution via a cash distribution of RM350 million. The Proposed CIMBB Distribution shall be effected via Section 64 of the Companies Act, 1965.

Collectively, the Proposed Capital Swap and the Proposed CIMBB Distribution are referred to as the Proposals.

The entitlement on a per share basis would depend on the total number of CIMBB shares in issue as at the books closure date for the Proposed CIMBB Distribution. Based on CIMBBs issued and paid-up share capital as at 19 March 2003 of RM852,362,400 and assuming full exercise of all outstanding share options under the executive employee share option scheme which are exercisable up to 29 December 2004, the profoma enlarged issued and paid-up share capital of CIMBB would be RM859,350,200. Based on the Proposed CIMBB Distribution of RM350 million, the cash distribution would be approximately 40.7 sen per share.

CIMBs capital base currently comprises almost entirely of common equity (i.e. Tier-1 capital). By raising Tier-2 capital and returning equity to shareholders, CIMBBs return on equity (ROE) would improve.

The Proposals are an integral part of the groups capital management plan, which seeks to continuously improve the groups capital structure and maximise shareholder value.

The Proposed Capital Swap is subject to the approvals of:

(b) The Securities Commission for the Proposed Bonds Issue which was obtained via its letter dated 24 March 2004;

(e) The High Court of Malaya for the Proposed Distribution, if required.

The Proposed CIMBB Distribution is subject to the approvals of:

(b) The High Court of Malaya.

The Proposed CIMBB Distribution is conditional upon the Proposed Distribution.

The proforma effects of the Proposed CIMBB Distribution on the issued and paid-up share capital and share premium of CIMBB based on the latest audited financial statements of CIMBB as at 31 December 2003 are set out in Table 1.

Based on the latest audited financial statements of CIMBB as at 31 December 2003, the proforma effects of the Proposed CIMBB Distribution on the NTA of CIMBB are set out as Table 2.

The Proposed CIMBB Distribution would not have any effect on the shareholdings of the substantial shareholders of CIMBB.

Baring unforseen circumstances, the Proposals are not expected to have any material effect on the earnings of the CIMBB group for the financial year ending 31 December 2004.

The Proposed CIMBB Distribution is expected to have a positive impact on its ROE. Based on the profits after tax and minority interest for the financial year ended 31 December 2003 and opening shareholders funds adjusted for an interim dividend payment on 30 May 2003, the proforma ROE of CIMBB group would increase from 19.0% to 23.9%.

Based on the audited financial statement for the financial year ended 31 December 2003, the core capital ratio of CIMB of 22.1% (after the final dividend of 26.7 sen by CIMB to CIMBB) would result in an increase to 22.8% after the Proposed Capital Swap.

Based on the audited financial statement for the financial year ended 31 December 2003 the RWCR of CIMB of 22.1% (after the final dividend of 26.7 sen by CIMB to CIMBB) would result in an increase to 22.9% after the Proposed Capital Swap.

The estimated timeframe for the implementation of the Proposals is set out as Table 3.

Further announcement would be made as and when the approvals referred to in item 3 above have been obtained.

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